Randolph S. Simpson I - Page 5

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          reported, yielding an adjusted gross income of $48,724.                     
          Petitioner entered "-0-" on line 50, Tax on qualified retirement            
          plans (including IRAs) and MSAs.  He did not attach Form 5329,              
          Additional Taxes on Qualified Plans (Including IRAs) and Other              
          Tax-Favored Accounts, to his return.                                        
               In the notice of deficiency and accompanying explanations,             
          respondent determined that the 10-percent additional tax under              
          section 72(t) was due on the premature distribution from the                
          United States Trust Co. of America.  In the amendment to answer,            
          respondent claims the $17,900 paid by petitioner to his former              
          wife is not deductible as alimony.                                          
               The first issue is whether petitioner is liable for the 10-            
          percent additional tax on the distribution from the qualified               
          retirement plan under section 72(t)(1).  Section 72(t) provides             
          for a 10-percent additional tax on early distributions from                 
          qualified retirement plans, as follows:                                     

                    (1) Imposition of additional tax.-–If any taxpayer                
               receives any amount from a qualified retirement plan (as               
               defined in section 4974(c)), the taxpayer’s tax under this             
               chapter for the taxable year in which such amount is                   
               received shall be increased by an amount equal to 10 percent           
               of the portion of such amount which is includible in gross             

          The term “qualified retirement plan” includes any plan described            
          in section 401(a), which includes qualified stock bonus plans               
          such as the ESOP in which petitioner participated.  Sec.                    

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